A concise synopsis of the Washington DC Real Estate Market
Buzz Around the Office
Real estate bidding wars are back in DC. Many eager Washington area home buyers are shocked to find that prices aren’t where they used to be. Home values have jumped substantially in many neighborhoods as more buyers are competing for fewer homes. Soaring demand is being driven by the historically low borrowing cost as well as an overall change in buyers’ perception of the DC real estate market. There is no debating that prices have already bottomed in the Washington Area and that home values are on the upswing. Multiple offers have quickly become the new normal with most multiple offer scenarios occurring at the first time buyer level – under $400,000 and in the move-up range under $700,000. Homes priced close to market price with potential for improvement are the most likely to see more than one competing offer.
Home buyers are being faced with tough decisions – submit an offer with all the contingencies for typical concerns…home inspection, appraisal, financing, etc… or try to write an offer that cannot be beat. In today’s market, more buyers are electing to forgo the home inspection (based on getting a home inspector through the property prior to making an offer). They are also leaving out the appraisal contingency based on research of similar properties nearby as well as the financing contingency if they have good jobs, plenty of savings, and solid credit scores. When submitting a non-contingent offer the deciding factor is typically the offer price. The question many buyers face is: How much over list price can we go before we run into problems with our lender?
As buyers continue bidding up prices, neighborhoods that had largely been ignored by developers until now are quickly being redeveloped. While the fundamentals remain the same, areas that were considered either too gritty or too far out only a year or two ago are now bustling with construction activity. The process of urban renewal continues to gain momentum in the Nation’s Capital.
Local Business Spotlight
The Brixton Pub is the latest offering from the Hilton Brothers and easily one of the largest bars on U Street. They did a fantastic job recreating the feeling of an old English pub while making great use of the space. The bar features three massive levels with loads of dark wood finishes, intimate lighting, and old fashioned fixtures throughout. In the battle of DC rooftop decks the Brixton is definitely a heavyweight. Their rooftop has two spacious bars, plenty of cozy seating options, as well as an impressive view of the DC skyline. The menu at the Brixton includes a solid list of British favorites and their staff is attentive and friendly. Although it tends to be on the pricier side by U Street standards, it’s certainly worth checking out. Visit them online at http://brixtondc.com/ or in person at 901 U Street NW.
Washington DC Real Estate Trend Indicators
The median sales price this July was $455k. That's an all time high in DC! Prices are definitely back in the District. 455k is up 2.8 percent from last July's median sales price. The average sales price to original list price ratio was 96.8 percent in July 2012. That's up from a sales price to original list price ratio of 94.9 percent in July 2011. Pending sales in July 2012 were down 12.5 percent over July 2011. The time properties sat on the market fell a whopping 17 days over last July, with the current average at 52 days on market. There were 1,491 active listings in Washington DC in July 2012 which is down 33 percent from the number of listings on the market at this time last year. A total of 632 properties sold in July 2012 which is up 7.9 percent over July 2011. Continued strong demand in the DC area and a low supply of listings will likely continue to push up prices in the foreseeable future. If you're interested in additional information, please check out our partner's monthly video update:
Mortgage Rate News
Mortgage rates are ridiculously low. Crazy low. If you bought in July 2012 take a bow - you took advantage of the lowest interest rates in over 50 years. Interest rates have dropped 15 straight months dating back to last April when the average rate on a 30 year fixed mortgage was 4.84 percent. The average rate on a 30 year fixed mortgage was 3.55 percent in July 2012. If you're lucky enough to find a house to buy, then the historically low interest rates will make owning that home more affordable than ever. When you consider borrowing money at 3.55 percent in comparison the average US inflation rates being close to 4 percent, you're basically borrowing the money for free!
The U Street Corridor has a rich and eclectic history deeply rooted in both the African American community as well as the music scene throughout the 1900s. In the 1920s the neighborhood was home to the largest African American community in the country and was known as “Black Broadway,” an idiom coined by actress and singer Pearl Bailey. The U Street Coridor was once home to jazz giants...
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Compass is a licensed real estate brokerage that abides by Equal Housing Opportunity laws. Information is compiled from sources deemed reliable but is not guaranteed. All measurements and square footages are approximate. This is not intended to solicit property already listed. Compass is licensed as Compass Real Estate in DC and as Compass in Virginia and Maryland. 1313 14th Street NW, Washington, DC 20005 | 202.386.6330